Sephaku Cement (SepCem) reported an after-tax profit of R42.6 million for the financial year ending December 31, 2024, slightly up from R41.9 million in 2023. This was achieved despite a 4% drop in sales volumes and a 1.4% decline in revenue, which fell to R2.79 billion from R2.82 billion in the previous year.
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) dropped 11.2% to R320.7 million. The company experienced strong EBITDA growth in the first half of 2024, increasing to R146.7 million from R106.9 million in 2023. However, unplanned kiln stoppages for repairs in the latter half of the year led to higher overhead costs and reduced production, negatively impacting profitability.
To counteract market pressures, SepCem has implemented various cost-saving measures, monitored by the Dangote Group. Additionally, lower finance costs and depreciation charges helped stabilise after-tax profit. The company also made significant strides in debt management, reducing its bank loan capital balance to R135 million after repaying R183 million, including R27 million in accrued interest.
Meanwhile, concrete supplier Métier faced challenges due to sluggish economic conditions and weak construction sector demand, leading to lower sales volumes. However, its EBITDA increased thanks to cost-saving efforts and price adjustments. Métier currently has R125 million in utilised finance facilities out of an available R200 million, with a net debt position of R75 million at the end of February 2025.
SepCem noted that while building materials demand remains constrained, some government infrastructure projects have commenced, which could boost the construction sector. “Given current economic conditions, a defensive approach is necessary, with the flexibility to respond to short-term opportunities as they arise,” the company stated.